Universal Corp.’s net income for the first quarter of fiscal year 2014, which ended on June 30, at $58.3 million ($2.05 per diluted share), was up from $23.1 million ($0.81 per diluted share) during the three months to the end of June 2012.
Net income included a gain of $81.6 million before tax ($53.1 million after tax, or $1.98 per diluted share) resulting from a favorable outcome of litigation by the company’s operating subsidiary in Brazil related to previous years’ excise tax credits.
Excluding that nonrecurring gain, first quarter net income decreased by $17.9 million.
In announcing the results, George C. Freeman III, chairman, president and CEO, said that, as expected, carryover shipments of tobacco were considerably lower in the first quarter of this fiscal year as shipments of the smaller crops grown in fiscal year 2013 were substantially completed by March 31, 2013.
And Freeman said that Universal was expecting a reduction in the overall volumes shipped during fiscal year 2014 compared to those of fiscal year 2013.
“We are also watching crop development as the seasons unfold, particularly in the United States, where crop sizes have been negatively impacted by recent high levels of rainfall,” he said.
“Burley crop levels are down from earlier projections in some origins, exacerbating the undersupply conditions expected for that type of tobacco this year.
“In addition, global demand is strong, and we are seeing volatile green tobacco prices in Brazil that have disrupted markets and pressured margins there.
“Changes in shipment timing, crop sizes and market pricing are not unusual in our business, and we still expect fiscal year 2014 to be a solid year,” he added.
Category: Breaking News